Inflation and the Poor
Posted: 15 Oct 2000
Using polling data for 31,869 households in 38 countries and allowing for country effects, Easterly and Fischer show that the poor are more likely than the rich to mention inflation as a top national concern. This result survives several robustness checks.
Also, direct measures of improvements in well-being for the poor - the change in their share of national income, the percentage decline in poverty, and the percentage change in the real minimum wage - are negatively correlated with inflation in pooled cross-country samples.
High inflation tends to lower the share of the bottom quintile and the real minimum wage - and tends to increase poverty.
JEL Classification: E310 O110 D310 I300
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